How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 497.36

-1.9%

3:59 PM EST

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To: jerry sullivan who wrote (5161)	2/17/1998 6:19:00 PM
From: johnd	Read Replies (1) of 74651

Why MSFT could be under pressure in the short term - continued One point I wanted to make earlier regarding why MSFT could be under price pressure in the shorter term but did not is the PE correction pressure. We are heading to two quarters (March and June) where MSFT, as indicated in Q2 conference call, will report a few pennies higher for March quarter (let us say 87c - 90c) and possibly a sequential decline in June quarter (let us say 85 - 88c). If the above are true, they would be at best 15% and 10% EPS growth over previous year identical quarters. That kind of guideline from Mr. Greg Maffie (MSFT CFO) has lead Wall street to keep a FY98 EPS of 3.26, Calender 98 EPS of 3.60, and FY 99 EPS of 3.96. Let us say wall street expectation on EPS are about correct, then a PE correction while reporting 15% and 10% year over year growth could put pressure on PE in the short term and "reported trailing PE" could come down to mid 30s producing 144 (77) by Jan 98 and 160 (80) by June 99. Brian, Reginald, Sonki, Ibexx: Are you guys there? What do you guys think? [Full disclosure: I am long MSFT] johnd

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